Rebuilding Your Credit and Getting the Best Credit Card Deals

Credit is one of those things that people tend not to think about until it starts to affect them directly. People with a good credit history really never think about credit, as their excellent credit history allows them access to everything: the best credit card deals, all the new credit card deals and just generally the ability to apply for all of the best credit cards and have their credit card applications accepted.

People with bad credit think about it all the time, as their poor credit severely hampers them and the credit card deals they can get. Go online and find best credit card deals, then have a look at how many of them are allowable to people with bad credit or even no credit. It’s just a simple fact of life that all the good credit card deals are not accessible by people with poor credit and the only way to get those great credit card deals is to improve your credit (or build it in the first place if you have no credit).

Here are a few reasons to have good credit:

• Credit card flexibility: All the top credit card deals are usually only available to people with good credit. To get a great credit card deal, you need good credit.
• Specialty credit cards: gasoline credit card deals and frequent flyer credit cards are examples of specialty incentives that offer people more bank for their credit card buck. These also usually require good credit to obtain.
• Getting your dream home: If you’re rich enough to pay for it outright, then this article really has nothing to offer you. For the rest of us, buying a home requires getting a mortgage from the bank. A mortgage requires good credit to obtain.
• Buying your dream car: If you’ve saved up enough to buy your car outright, then chances are you probably don’t have a credit problem anyway, but people that want to finance their car purchase need to have good credit.

Now that you know why it is desirable to have good credit, let us start examining a few ways to get good credit.

There are essentially two pathways to getting good credit: one that involves coming from having no credit and one that comes from having bad credit. For those of you in the United States, remember that most US credit card deals require good credit, so use this as your motivation along the pathway to getting good credit.

The plan is essentially a two-phase plan with multiple steps in each phase. People with bad credit need to complete both phases of the plan, while people with no credit can usually skip phase one and go right into the latter part of phase two (of course read everything and do the steps that apply to your particular situation).

Understanding, Research and Verification in Phase 1

Step 1 – Understanding

The first step to fixing bad credit is to understand where bad credit comes from. This is a bit similar to step one in the programs for alcohol, drug and gambling addictions except the problem here is bad credit. There are a couple of causes of bad credit and your first step along the road to rebuilding your credit is to understand which cause applies to you:

The first cause is something unforeseen and involuntary such as illness or layoff. In this case, a person might not have any choice but to miss some payments and take out loans in order to cover expenses. It might be a matter of life and death. In that case, once the person gets better or finds another job, they can be sure that their problem is over and proceed onto the next step.

The second cause is something very preventable, such as impulse purchases or addictions. These types of problems, unless stopped, are going to result in a downward spiral and nothing will be able to prevent that. Before continuing on to the next step, seek counseling or other help to get the problem under control.

Step 2 – Research and Verification

Once you’ve done that, it’s time to figure out what you’re up against. Get a copy of your credit report and read it thoroughly. Be sure to note anything that is out of date, inaccurate or just plain missing.

Your goal at the end of this step is to have a completely accurate credit report, with all of the events (both good and bad) on it. This will give you a clear image of the problem as a whole and allow you to take appropriate steps to solve it. Remember that more recent information trumps old information and as you continue to prove yourself; your credit will continue to improve.

Once you’ve verified everything, the last thing to do is exercise your right to explain, in 100 words or less, the bad items on your credit report. This could mean the difference between acceptance and being rejected on your next loan request, so take the time to phrase your replies carefully.

Planning and Execution is Phase 2

Step 3 – The Plan

The plan is your step-by-step plan to paying down the debt and rebuilding your credit. It starts with working out your monthly finances and figuring out exactly how much you can afford to allocate each month to paying down your outstanding debts. These outstanding debts are arguably the most damaging thing to have on a credit report and therefore the most damaging to your chances of doing things like getting some good business credit card deals if you want to start a company (something many people with bad credit have either already done or are considering doing).

Once you’ve figured that out, it is then time to also figure out what you’re going to do help your credit along. This could be something like applying for a small loan and paying it back (if you can get one) or taking advantage of some of the best secured credit card deals and using them as a jump start to proving your newfound ability to handle money well. Another alternative is to get a friend or relative to co-sign a loan for you and just pay that back in turn.

Step 4 – Executing the Plan

This is the hardest step, but also the one that requires the smallest explanation. Stick to your plan rigidly, make your monthly payments and whenever you can afford it, increase the payments to reduce the debt quicker. A few months in (or whenever you have it scheduled in your plan) take the extra actions to improve your credit, whether it’s a co-signed loan or a secured credit card or something else.

If you ever find yourself faltering, go online and compare credit cards for good and bad credit. Compare loans for good and bad credit. Think about every single thing that you can never have with bad credit. This should keep you going when times are tough and see you through to the end.

Final Words about Credit Cards

Remember that ultimately the only one who can fix your credit is you. It’s not a quick process, but a slow one that takes a lot of effort. But it is possible. You can have access to all the best credit card deals, the best credit cards and the best credit card rewards.

Wouldn’t it be great if you could get a pre-approved credit card, or a guaranteed approval credit card? How much money would you save if you were approved for a low interest credit card? What do you think you would feel if you were able to pull yourself out of the hole of bad credit and all your hard work and persistence resulted in being able to take out a loan to buy the home of your dreams?

With a patient mindset and some hard work, all that and more can be yours.